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For Kenneth Feinberg, More Delicate Diplomacy

Crowds like this in Lafitte, La., turned out for Kenneth Feinberg, overseer of the $20 billion oil spill compensation fund.Credit
Jennifer Zdon for The New York Times

NEW ORLEANS — Kenneth R. Feinberg, hopping in and out a Learjet, a helicopter and several S.U.V.s, took his gift for oratory to four towns in southern Louisiana on Thursday to make his pitch to locals: The $20 billion fund from BP to compensate those harmed by the Gulf of Mexico oil spill, and they should get their share.

Even with that kind of bankroll to pay claims, he was playing the role of salesman and politician.

“This program I am running is absolutely voluntary — nobody has to do it,” he said at one stop. “It’s my opinion you are crazy if you don’t participate.”

Mr. Feinberg knew he was facing many skeptics — and cynics — who no doubt wondered if they could get more money from the oil company, not to mention satisfaction, in the courts. He acknowledged the doubters, noting that they were being asked to sign up for “a program that’s never been tried, never been tested and that they view with some skepticism.”

But Mr. Feinberg has brought people to the table many times before, including the families of the victims of the Sept. 11 attacks, Vietnam veterans injured by the herbicide Agent Orange and women harmed by the defective Dalkon Shield birth control device.

Such high-stakes mediation involves powerful, conflicting forces. In this case, BP hopes to settle disputes with money from the fund with as many people as it can to minimize the question of liability hanging over the company.

Federal officials hope they choose that route, too, because that will ensure that BP can keep paying its obligations. Courtroom litigation raises uncertainty — about the ultimate cost for BP, and for the victims who choose to fight in courts.

Despite his 64 years, Mr. Feinberg shows no sign of slowing down as he cajoles people to steer clear of the courts. His campaign stops are high-energy affairs. He jabs the air, punches up words to drive home a point and gets laughs with self-deprecating references to his Boston accent.

“It’s a campaign,” he said. “It’s a road show. It’s a seminar.”

And it is a long day.

Flying on a private jet paid for by BP, Mr. Feinberg arrived in New Orleans early, though it was already his second stop of the day, after a 7 a.m. visit with Gov. Bob Riley of Alabama.

At the Jefferson Parish Council chambers in Harahan, he told a crowd of civic leaders and business people that he was there because his years of experience in administering compensation funds taught him a lesson.

“You cannot do this from Washington,” he said. “You’ve got to be down here in the gulf.”

He assured them that while he was approved by the president and is spending BP’s money, “I am not beholden to the Obama administration, I am not beholden to BP — I am an independent administrator, calling the shots as I see them.”

He described the two-part claims process. It begins with the relatively easy process of getting emergency payments, available without obligation to eligible claimants who can prove their losses, up to six months’ worth of damages at a time. (BP has paid out more than $200 million from 36 claims offices to more than 32,000 claimants so far.)

Photo

Kenneth R. Feinberg, the administrator of a BP fund to compensate those harmed by the Gulf of Mexico oil spill, at a gathering on Thursday in Lafitte, La.Credit
Jennifer Zdon for The New York Times

Then, 90 days after the well is finally plugged, comes the tougher phase of the three-year program: negotiating with each claimant for the lump sum to cover economic losses from the spill. Those who accept the payment will have to sign a waiver stating that they will not sue BP.

“If you think the lump sum payment is inadequate, don’t sign,” he said, adding that the litigation route in court will mean uncertainty, years of delay and a big cut for the lawyers. “I am determined to come up with a system that will be more generous, more beneficial, than if you go and file a lawsuit.”

His message is blunt, but he wins many people over. Rather than saying “cheese” when he posed for a photo with four police officers, he said, “Everybody file a claim?”

Later that morning, in Houma, he faced an audience of oil rig workers and commercial fishermen. He acknowledged that many people run an all-cash business, explaining that his standards of proof, especially for emergency payments, were not crushing. “Show me a tax return,” he said in mock dialogue, and drawled in response, “Well, I lost it,” which elicited knowing laughs.

Mr. Feinberg said he could get to yes. “Do you have a profit and loss statement? Do you have a checkbook? Check stubs?” he said. “No? Well, then, tell the captain of the boat, or your priest, to vouch for you.”

During the Q. and A., Wade Bonvillain, who has a soft-shell crab business, claimed angrily that the gulf would be dead for 30 years. “Is BP or the government going to come eat those crabs?” he asked.

“I don’t know if I’m going to eat the crab or not,” Mr. Feinberg said, and then outlined the process that would be used for estimating and negotiating for lost revenue into the future.

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Mr. Bonvillain, wearing a black T-shirt with images of the wrestler John Cena and the words “Hustle-Loyalty-Respect,” stalked out of the hall. Outside, he declared that he would not join the fund, which he called “selling yourself out cheap.”

Back inside, Jerri G. Smitko, a local lawyer, held a sign reading “BP — A Bayou Degradable Company.” She said she would urge her clients to join the fund for the relative certainty of a payment. “It would be silly not to go through the process,” she said.

The crowd was ethnically mixed, with Cajuns, African-Americans and Vietnamese in the church social hall, with its large crucifix and electronic bingo board.

After the talk, Joseph Buras complained that documenting income would be unfair because the last two years have been cruel to shrimpers, with low prices and high costs.

Mr. Feinberg replied, “If business was bad before the spill, I’m not a magician. I can’t change that. At some point I have to say, ‘Don’t blame the spill — life’s unfair!’ ”

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Louisianians at the meeting in Lafitte listening to Mr. Feinberg, who urged them to participate in the compensation program.Credit
Mario Tama/Getty Images

At the Lafitte civic center stop in late afternoon, a woman waved a sheaf of receipts at him to claim that this was going to be a bountiful year for shrimping, so reimbursement should be higher than might be judged from the previous two disappointing years.

“Don’t give it to me now,” Mr. Feinberg answered, adding that they needed to prove it at the claims office. “You can’t go in and say, ‘Trust me.’ ”

That evening, at the New Orleans airport, Mr. Feinberg slumped in an armchair, his blue suit wrinkled, his shirt soaked through, and reflected on his latest challenge.

BP approached him in June about the fund, which was fast becoming a matter of contention as complaints about delays piled up. The White House approached him, too.

While he ran the 9/11 fund without charge, he is getting paid for this work, though he declined to say how much.

The job is only for those who can deal with the pain of others. After 9/11, a firefighter’s widow once told him, “I spit on your children,” he recalled. “You can’t let it get to you.”

Emotions run high across the gulf, with people seeing their way of life disappearing. “If you’re not willing to go into the lion’s den and confront the emotion and the hurt, you shouldn’t do it,” he said.

The plan has come under attack from some public officials, who argue that the three-year program for the fund ignores the potential long-term effects from the spill.

“This is going to go on for three, five, 10 years after the spill is stopped,” the Mississippi attorney general, Jim Hood, told The Mobile Register this week. Mr. Feinberg “can’t treat it like 9/11,” which, he said, for all of its horror, took place on a single day.

Mr. Feinberg said he would work with experts to project the long-term effects. Most people, he knows from experience, will accept the lump-sum payment once it is offered.

“The question is, is the payment sufficient” to account for damages into the future, he said. “Am I offering the right amount?”

He finished a cup of coffee and got up to go. He had a dinner meeting, and the next day was flying off to do it all again in Mississippi.

A version of this article appears in print on July 17, 2010, on Page A11 of the New York edition with the headline: More Delicate Diplomacy for the Overseer of the Compensation Fund. Order Reprints|Today's Paper|Subscribe